The yield on 12-month bills also fell 10 basis points to 18.40 percent as 1.2 billion rupees in bids were sold.
No 3-month bills were sold.
Before the auction authorities were offering 12-month bills at 18.40 percent and 3-month bills at around 17.10 percent, dealers said.
The public debt department had been selling bills before and after the market from late last year in a bid to reduce pressure on rates.
Analysts say such practices are a marked improvement from Sri Lanka's earlier method of printing money and taking the bills onto the central bank's books after rejecting bids at the auctions.
Wednesday's bill rejection came after a long string of successful auctions and steep falls in yields.
Unlike selling bills before and after the auction, bill rejections drives money away from government securities markets to banks and the corporate debt market.